U.S. mall vacancies at highest rate in a decade

Vacancies at U.S. regional malls have risen to their highest level in more than a decade despite eight months of improving retail sales, new data from Reis shows. According to Bloomberg News, the vacancy rate — 9.1 percent in the first quarter, up from 8.7 percent in the fourth quarter of 2010 — has continued to climb nationwide because there’s a roughly nine- to 12-month time lag between rebounds in sales and in demand for retail space. Plus, closings by the bankrupt Borders Group and by Macy’s have hit malls hard. Local shopping centers haven’t fared much better, posting a 10.9 percent vacancy rate in the first quarter, the same as the rate in the three prior quarters but still at the highest rate since 1991. Victor Canalog, chief economist at Reis, said he expects the retail sector to begin to rebound “later this year or early next year.” [Bloomberg]